How Much Is an Airbnb Listing Really Worth?

Jason Clampet, Skift

- Mar 21, 2014 3:15 pm

Skift Take

For a company with few physical assets, Airbnb demands a high value for its listings. But this value reveals more about how the lodging economy is evolving more than it tells us about what the sharing economy leader is really worth.

Unlike many darlings of the startup scene, Airbnb has plenty of revenue coming in. But is there enough to justify a value that puts it above the market caps of Hyatt, Accor, Wyndham, InterContinental Hotel Group, and Choice Hotels, not to mention the public and profitable HomeAway?

A few years ago comparing a vacation or short-term rental company to a hotel brand would have been downright silly. At their extremes, rental sites were electronic bulletin boards while hotels were brick and mortar establishments with lots of employees and dependencies.

In an asset-light strategy, hotel brands make money from management contracts and a double-digit share of gross revenues. Airbnb collects fees from the host and the user, and HomeAway offers a mix of plans, from the more traditional subscription to a percentage of each booking. In the end, they all offer the promise of a night’s sleep with a varying array of comforts and amenities. And users discover and book them in much the same way.

What’s a Room or a Listing Worth?

Hospitality Brand

Number of rooms/listings

Market cap/valuation

Value of room

Hyatt

147,388

$8.42 billion

$57,128

Starwood

346,063

$14.97 billion

$43,258

Hilton

678,630

$21.86 billion

$32,211

Airbnb (adj.)

330,000

$10 billion

$30,303

Marriott

675,623

$16.15 billion

$23,903

Accor

455,985

$8.55 billion

$18,759

Airbnb

550,000

$10 billion

$18,181

Wyndham

600,000

$9.3 billion

$15,500

InterContinental Hotel Group

686,873

$7.93 billion

$11,545

Choice Hotels

500,000

$2.71 billion

$5,420

HomeAway

890,000

$3.87 billion

$4,348

Who’s on Top

Using some third-grade math, we put a value on each room and listing for the major public hotel companies, as well as Airbnb and competitor HomeAway. Admittedly, there is a bit of comparing apples to oranges here. But understanding which fruit is what helps explain the transition that’s happening.

The number of available rooms held by the hotel chains are disclosed publicly, and they tend to range from single rooms to suites and even to some vacation rentals (at Wyndham and Marriott in particular).

A “listing” on a rental website could be for a multi-room house or a bed in a shared room (although that is incredibly rare). They also are not constant. The volume of listings fluctuate by season (summer rentals), opportunity (a big event in town), and need (the host needs to make some extra cash). They may also only be available a few days a week — and can disappear overnight. This is changing, though, as HomeAway and Airbnb are more about professional landlords than one-off hosts.

HomeAway’s number of listings is revealed in public disclosures. The number of Airbnb’s rooms is somewhat of a mystery. The latest number it has shared with media is 550,000 listings. When Skift looked at the New York market, we saw a wide discrepancy — our numbers were 40% less than Airbnb’s numbers — between what it stated on the website and what our data dive revealed. Because of that, we’ve provided both an adjusted number based on a ‘Skift discount’ and one based on Airbnb’s numbers.

HomeAway has more overnight options than anyone else has rooms or listings, but it’s at the bottom of the pile when it comes to the value of these listings in comparison to its market cap. As HomeAway moves more property managers from a subscription model to a per-night transaction fee, expect this value to increase.

On the flip side, Hyatt does not have the largest market cap (it’s smaller than the Airbnb valuation), but its rooms are worth more than any of its competitors. Starwood and Hilton also appear at the top, with Marriott and Accor sandwiched between the two Airbnb values. Choice Hotels, with its voluminous yet low-budget offerings like Days Inn, brings up the bottom for hotel brands.

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